Profit-Taking Hits Dow Again; Index Off 11.97

Stock prices lost more ground in profit-taking today, continuing the pullback that began in Tuesday’s session.

The Dow Jones average of 30 industrials, down 6.08 Tuesday, dropped another 11.97 points to 2,773.36.

Analysts said traders increasingly yielded to the temptation to cash in their gains after the market’s rise to record highs last week and Monday.

The tendency to lighten up was apparently heightened by a dimming of hopes for any moves soon by the Federal Reserve to relax its credit policy. Interest rates, which had been dropping in recent days on hopes of some stimulus from the Fed, rose in today’s credit-market activity.

In the broader market declining issues outnumbered advances by more than 2 to 1 on the New York Stock Exchange, with 453 up, 1,018 down and 498 unchanged.

Big Board volume totaled 164.07 million shares, up from 147.56 million in the previous session.

The NYSE’s composite index fell 1.19 to 197.81.

Bond Prices Decline

Bond prices were slightly lower in dull trading early today.

The Treasury’s closely watched 30-year bond was down 1/16 point, or 62 cents for every $1,000 in face value, at around midday. Its yield was unchanged from late Tuesday at 8.01%.

Analysts said some traders continued to sell bonds to cash in gains made in last week’s strong rally, but there were no fresh developments moving the market.

Market participants are looking toward Friday’s scheduled government report on wholesale price inflation for September as a possible source of direction for bond prices.

In the secondary market for Treasury bonds, prices of short-term government issues were 1/32 point lower to 1/32 point higher, intermediate maturities were unchanged to 1/16 point lower, and 20-year issues had slipped 1/16 point, according to Telerate Inc., a financial information service.

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

The Shearson Lehman Hutton daily Treasury bond index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, was down 0.43 at 1,184.85.

In corporate trading, industrials also declined. Moody’s investment grade corporate bond index, which measures total return on a portfolio of 80 corporate bonds with maturities of five years or longer, had fallen 0.28 to 333.64.

Yields Mixed

Yields on three-month Treasury bills rose to 7.94% as the discount jumped 7 basis points to 7.69%. Yields on six-month bills increased to 8.08% as the discount advanced 8 basis points to 7.67%. Yields on one-year bills rose to 8.05% as the discount edged up 1 basis point to 7.51%.

A basis point is one-hundredth of a percentage point. The yield is the annualized return on an investment in a Treasury bill. The discount is the percentage that bills are selling below the face value, which is paid at maturity.

The federal funds rate, the interest on overnight loans between banks, was quoted at 8 7/8%, unchanged from late Tuesday.